Till the early nineties, business in the industrial town of Batala was booming. People raked in the moolah, setting up industrial units here, there and everywhere. It was almost like dealing in lottery tickets. What nobody told them was that riches acquired in such haste rarely stay for long.FEP abolition dealt a deadly blowThe first signs of trouble appeared in 1992. Then Finance Minister Dr Manmohan Singh sent the Freight Equalisation Policy (FEP) to the gallows. Introduced by the Union government in 1952, the policy had been designed to ensure that companies paid the same price for key raw materials such as coal, iron ore and steel, irrespective of where they were located. The government subsidised the cost of transporting these minerals to achieve this.The objective was balanced regional growth. In practice, however, the policy benefited industrial regions while hurting mineral-rich eastern states.Dr Manmohan Singh regarded the FEP as a piece of bad economics and did away with it as part of the government’s industrial policy.For Batala, the consequences were severe.The city found itself caught between the devil and the deep blue sea. Its industrialists were unable to cope with the sudden abolition of the FEP, yet lacked the resources to move their units closer to the sources of raw materials.Numbers tell a grim storyData culled from the Industries Department reveals that around 60 per cent of Batala’s industrial units have closed shop over the last three decades or so. Those that have survived are not necessarily out of danger. Many could also down their shutters if the state and Union governments fail to address their problems.There was a time when Batala’s factories flourished on cast-iron products, sports goods, lathe machines and agricultural implements. The city also had thriving commercial links with Lahore, Sialkot, Faisalabad and other business centres across the border. Then came the Radcliffe Line, severing those markets and cutting off a trade network that had sustained the region for generations.Today, Batala needs more than assurances and political rhetoric. It needs a 20-year reconstruction plan covering small and medium enterprises, industrial research and employment for its youth.From 2K foundries to barely 400Consider the decline of its foundries. On a conservative estimate, Batala had around 2,000 foundries in 1980. Today, only about 400 remain. Of these, barely 100 are ‘alive’—a term used to describe a foundry that is running successfully.The story is much the same in agricultural implements. More than 450 firms once manufactured these products. Only around 120 remain.Parmjit Singh Gill, president of the Batala Industrial Estate Factories Association (BIEFA), is an industrialist who has weathered many a storm. He says the decline has affected virtually every segment of Batala’s industrial base.“Manufacturers of machine tools have been wiped off the industrial map, while producers of galvanised pipes, conduit pipes, brass cutting and aluminium doors and windows are gasping for breath. Industries dealing in wooden and steel furniture are dying a slow death,” he said.“Industrial failure is a slow process, but it is happening at a fast pace in Batala. It harms not just the factory owners, but also the workers and the national economy. When factories shut down, people lose jobs and goods become expensive.”Industry squeezed by rising costs, cheap importsThe pressures have accumulated over decades.Ravinder Handa, Secretary of the BIEFA, points first to the eighties, when militancy took a heavy toll on industry in the region.“In the eighties, militancy, that was so pronounced here, killed the industry. Then came the FEP bug. Where does the Batala businessman go in the absence of tax rebates and electricity concessions? If states like HP and JK can give such rebates, why not Punjab?” asks Handa.“For the past two decades, the industry has been registering a negative growth rate every year. The cost of raw material procured by the foundries here now exceeds the price of finished goods produced by units located in the vicinity of steel plants.”Handa believes the problem requires a broader policy response.“The Central Government should come up with a special package for the four border districts of Punjab—Gurdaspur, Amritsar, Tarn Taran and Ferozepur. There should also be a rationalisation of the tax structure, which should be based on a fixed turnover basis like they have in the textile sector,” he said, adding, “The decision to allow the import of second-hand machinery, too, has hit us hard. Industrialists manufacturing new machinery in no way can compete with the rates of second-hand machinery procured from abroad.”The crisis, however, extends well beyond foundries.Surinder Bittu, a foundry owner, says the malaise has spread across Batala’s industrial landscape.“It is not just a question of foundries. The malaise has spread across the board. It is high time the government announces some rebates, or Batala may well be a haunted town in the near future,” said Bittu.Industrialists seek a revival packageThat warning comes against the backdrop of years of political promises. Apart from indulging in mere rhetoric, politicians, including MPs, have done little to mitigate the suffering of the city’s businessmen.Batala’s industrial decline has not happened overnight. It has been decades in the making—shaped by policy decisions, the loss of traditional markets, militancy, rising input costs and competition from cheaper second-hand machinery.What remains is a city with an industrial legacy but a shrinking industrial base.A government official said that the plight of Batala’s industries would soon be discussed with the Chief Minister and relevant stakeholders.For Batali’s industrialists, however, the question is no longer simply whether the government will discuss the crisis. It is whether there will be anything left to revive when the discussion finally turns into action.